SRA not sufficiently focused on risk, LSB says

The Solicitors Regulation Authority is yet to meet fully the regulatory standards expected under the Legal Services Act despite having achieved “much to be commended on”, the LSB has said.

In its report published this morning, the LSB said the SRA, as the largest legal regulator by far, faced a “considerable” challenge in regulating a diverse range of legal practices ranging from City firms to sole practitioners.

Victoria House said the SRA was “stepping up to this challenge” but that there were “significant areas where it has not yet fully met the standards it has set itself and more needs to be done to rectify this.”

The failure to focus more proportionately on outcomes for consumers, delays in authorising alternative business structures, and general IT delays – which resulted in the MySRA fiasco – came in for particular criticism.

“The SRA Board needs to focus proportionately less on policy consideration and proportionately more on the SRA’s operational performance and the outcomes it achieves for consumers,” the LSB said.

“More needs to be done to improve performance in the authorisation of alternative business structures (ABS), a process which has resulted in significant delays. IT delays, which have had a negative effect on risk identification and supervision, need to be overcome.”

In an unusually supportive statement, LSB chair David Edmonds (pictured) said he had “witnessed the progress that the SRA has made to become an independent regulatory body” and that the SRA “should be proud of the progress it has made so far.”

But, he went on, the SRA needed to “focus its efforts not only on the development of policy and procedures, but also, and rather more sharply, on performance and the opportunities and risks in the market place.”

While agreeing on the general thrust of the report, the SRA disagreed with “some of the detailed conclusions” reached by the LSB.

It disagreed in particular with the LSB’s findings in relation to its enforcement activity.

“Our concern [is] that the LSB’s approach is sometimes too narrowly focused on certain regulatory objectives without proper regard for the wider picture, or to the respective roles of the LSB and the frontline regulators”, said a spokesman for the SRA.